Looming house tax compels Chinese to divorce

Couples flock to untie the knot to exploit a loophole before a new home-sales tax comes into force.

Marriage registrars have seen unusually long queues of people wanting to separate from their spouse [AFP]

Chinese couples are rushing to divorce before a new tax on home sales hits after the government cracked down on property speculation, the Shanghai Daily newspaper has reported.

Shanghai's marriage registrars, - who also handle divorces - saw scores of couples rush in to untie the knot after China's central government announced a 20 percent tax on the profit from house sales on Friday.

A loophoole in the law allows couples with two properties who divorce and put each house into one person's name to then sell them tax-free under certain conditions, after which they can remarry.

An exemption from the tax applies to those who are selling their main home and have owned it for more than five years.

The registration centre in Zhabei District said had seen a record 53 divorces on Tuesday.

"We have never seen so many couples seeking a divorce in a single day, and by 2pm the number had already surpassed the previous high of 42 couples," its director, whose surname is Yin, told the state-backed paper.

Shanghai's civil affairs bureau confirmed the planned tax had triggered a rise in the number of divorces, but declined to give a total for cases across the city, the newspaper said.

He Zhanbiao, the administration's director, warned that some people might be taking a risk.

"Some men might trick their wives into getting a divorce using the tax as an excuse. But they might have a mistress and truly want a divorce," he said.

Estate agents across the city also witnessed long queues of people eager to sell.